Monday 22 March 2010 10.52 EDT
First published on Monday 22 March 2010 10.52 EDT

China and India, the world's most populous countries, have together lifted 125 million people out of slums in the last decade, while a further 112 million escaped poor conditions in the rest of the world, according to a new report from UN-Habitat, the UN agency for human settlements.

But increasing urbanisation has led to many more new slum-dwellers, meaning the total number now living in crowded, substandard housing – often without safe drinking water and sanitation – has increased by nearly 55 million people since 2000. The worldwide number of slum-dwellers now stands at 827 million and is on course to grow to 889 million by 2020.

Two-thirds of the world's slum-dwellers now live in Africa, the report found, the only continent to have made little progress in reducing slum numbers in the last decade.

Although north Africa made considerable progress reducing slum numbers, the 34 sub-Saharan African countries between them only improved the living conditions of 17 million slum-dwellers in the last decade. These countries now have virtually 200 million people – over 60% of their populations – living in slums. This proportion was only a slight improvement on 2000 figures.

Continual Chinese and Indian economic growth has radically reduced the numbers of people living in unacceptable housing in those countries but the most improved countries were Indonesia, Morocco and Argentina, which each reduced their slum populations by more than 40%.

While countries comfortably achieved the Millennium development goal to lift 100 million people out of slums by 2020, the UN says slum numbers will inevitably increase in the short term.

It warned: "The current global financial crisis poses a risk that advances in slum upgrading and prevention may be reversed. In addition, some gains can be undone by responses that do not take population growth into account."

Conflicts have increased the number of slum-dwellers by at least 10% in Central African Republic and Cote d'Ivoire. Elsewhere, countries like Ethiopia, Benin and Malawi now have more than 70% of their populations living in slums.

Southern Asia now has 190.7 million slum dwellers (35% of the population) and eastern Asia 189.6 million (28.2%).

Developed countries have about 6% of their populations living in unacceptable housing conditions, says the report.